S in ESG: Assessment of Social Sustainability in Real Estate - Critical Analysis of Social Taxonomy and Limitations of Certification Systems

This document, titled "S in ESG: Assessment of Social Sustainability in Real Estate - Critical Analysis of Social Taxonomy and Limitations of Certification Systems," was published as a master's thesis by Marianne Sar at TU Wien, focusing on the MSc program in Real Estate Management & Valuation. The thesis highlights the growing importance of social sustainability in real estate, contrasting it with the predominant focus on ecological aspects in the current sustainability discourse.

The thesis argues that while environmental considerations like energy efficiency are widely recognized, the social dimension ("S" in ESG: Environmental, Social, Governance) is often underrepresented in sustainability strategies within the real estate sector. Many companies struggle with effectively integrating social aspects into their sustainability reporting. There is a significant gap between the theoretical acknowledgment of social sustainability and its practical application in real estate projects.

The paper employs a critical analysis of existing certification systems, particularly focusing on the ÖGNI (Austrian Society for Sustainable Real Estate) certification in Austria to assess their ability to capture social sustainability criteria comprehensively. It identifies the need for clarity in social taxonomy and proposes a framework that includes various social criteria essential for the sustainable design of buildings, emphasizing community involvement, accessibility, and the consideration of local architecture.

The thesis reveals limitations in the current certification systems, noting that while the ÖGNI framework incorporates ecological and economic aspects, it lacks comprehensive social criteria. The author advocates for an expanded set of social indicators that could enhance the assessment of social sustainability in real estate. The research includes a critical review of the social taxonomy proposed by the EU, exploring its implications for real estate development.

In concluding sections, the thesis presents a criteria catalog designed to evaluate social sustainability in real estate, aligning with the EU's social taxonomy. This catalog includes specific indicators and metrics that allow for the assessment of buildings based on their social contributions. The developed scoring model, termed the "Score Card," aims to provide a practical tool for real estate companies to enhance transparency and optimize their properties' social sustainability.

The thesis emphasizes the urgent need for a coherent approach to integrating social sustainability within the real estate sector across Europe. It suggests that enhanced clarity and uniformity in defining and measuring social indicators can help align the industry with broader sustainability goals, contributing positively to urban environments and community well-being.